Perhaps the biggest mystery in economic analysis in the last few years has been trying to find an explanation for the big decline in labor force participation since 1999. A recent NBER working paper by Abraham and Kearney has posited the most comprehensive answer to date. Since it was summarized in this Washington Post article, I’m just going to quote a few paragraphs and suggest that you read the entire article....Angry Bear
China, not automation, is by far the biggest factor in the decline of prime age labor force participation
NewDealdemocrat
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As is clear from the chart above, the employment-population ratio (the blue line) has collapsed from a high of 64.4 in 2000 to 59 in 2014 (and had risen to only 60.1 by the end of 2017).* During the same period, the average real incomes of the bottom 90 percent of Americans have stagnated—barely increasing from $37,541 to $37,886.
That should be indicator that the problem is on the demand side, that employers’ demand for workers’ labor power has decreased, and not the supply side, that workers are choosing to drop out of the labor force.
But, as I explained back in 2015, that hasn’t stopped mainstream economists from blaming workers themselves—especially women and young people, for being unwilling to work and turning instead to public assistance programs and raising children and being distracted by social media and digital technologies, as well as Baby-Boomers, who are choosing to retire instead of continuing to work....Occasional Links & Commentary
Where have all the workers gone?
David F. Ruccio | Professor of Economics, University of Notre Dame
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EconoSpeak
Begun the Trade War Has
ProGrowthLiberal
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Michael Roberts Blog
Robots: what do they mean for jobs and incomes?
Michael Roberts
6 comments:
#MAGA:
https://twitter.com/capitolreport/status/969304464644591616?s=21
Somebody pinch me...
Steel used to be protected as a strategic industry. That's the angle I would take, although free trade purists would not like it.
However, the US already prevents the export of strategic goods including knowledge and technology. Why not also importation of when it threatened US strategic industry.
The only real strategic US industry is finance.
I was a arguing with a right winger on YouTube recently. I blamed the One Percent, at all they own and run the economy, which is now ruined, although they are making billions out of it, and he blamed the poor. He said they don't want to work, just live on government hand outs.
He also complained about globalization which was transferring all the US wealth to the third world. He had read a book about it, he said. He also said be was rich himself.
I said that the US empire has been stealing the natural resources of third world countries for decades, and if a country tries to stop it the US deposes of the government or send it's armies in. He said, 'oh man, you have it so wrong'.
What surprised me is that he really believed that the rest of the world was screwing the US, which was losing all its wealth. I said, look, the US elite are richer than ever, they aren't losing money.
In the end he blamed the problems on democracy, which allowed poor people to steal from the rich.
Don't you think that's odd, and disturbing, how could he believe such nonsense. The complete reversal of how everything I know about how the system works.
I blamed the One Percent, at all they own and run the economy,
Should have said, after all.
I read all the articles I could find by economists on the steel/aluminum tariffs tonight but it sounds like all the economists read the same text book and models on trade -- with a wide eyed innocence they predict consequences with broad consensus. "Prices will rise, consumers hurt, trading partners will be angry and respond" .
Those academic models upon which economists virtually unanimously agree seem to be at odds with observations and empirical data. If you simply look at other countries with protected steel and aluminum industries, prices generally equalize back lower than before toward world prices as capacity builds and domestic competition rises. Goods like steel integrate into a wide variety of finished products which continue to be imported when tariffs are applied to the steel content in those products, things get interesting.
Current US industrial metal industry is boutique and specialized designed to meet small specialty domestic requirements on government and engineering specs calling for domestic steel, prices on domestic steel are already 30% more than imports despite world's lowest input costs: US energy hyrdo/natural gas/coal prices some of lowest in world, cheapest coking coal, and abundant ore and scrap supply. There aren't any real productivity penalties to producing steel in the NA vs Asia or EU, the reason for the distribution of production in the world is not economic but entirely political. When large scale production returns to the US, it would be just as productive as foreign competition with equivalent technological capabilities and resource availability, it's hard for me to understand why economists aren't looking at real productivity gains from NOT importing and shipping steel around the world at the global system as a whole rather than pretending subsidies are gains to consumers in the US while ignoring those costs on the global population. Little talk of the benefits of producing steel and aluminum domestically to prevent air pollution and environmental problems, human rights abuses, which is where foreign firms tend to find advantage over US firms. If production is moved to the US I suspect the opposite happens to what economists are predicting, domestic steel prices fall, not rise. And the non-tariff cost of imports rise as costs to import rise on lower volumes.
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